New York City’s Hispanic and Latino Generation Xers and Baby Boomers are struggling to afford basic necessities such as housing, utilities and even food, and they’re massively unprepared for retirement, with just one in four having done basic planning.
A new AARP New York-Siena College telephone survey of 563 Hispanic and Latino city residents age 36-70 found 61% worry often about having enough money to retire—including 67% of middle class Gen Xers (earning $40,000 to $120,000 annually). The cost of key necessities is having a serious financial impact, including housing (69%), utilities (64%), and food (59%). Six of 10 say they’re at best just getting by. And 56% of middle class Gen Xers don’t plan to live in New York at all in retirement.
AARP unveiled Countdown: New York’s Vanishing Middle Class tonight at Instituto Cervantes, with Univision 41 Senior Vice president and General Manager Ramon J. Pineda moderating a community exchange about saving, planning and retirement.
The survey revealed that 63% of the city’s Hispanic and Latino Gen Xers (born 1965-1980) have not researched Social Security benefits, while two-thirds of both generations haven’t researched Medicare benefits (including 75% of Gen Xers). Seventy-nine percent of Gen Xers haven’t written out a plan for retirement, 69% have no plan for care if they become sick or disabled, and 52% haven’t even discussed retirement concerns with their life partner or family.
“Building a financial nest egg is becoming harder, but we can ease the middle class squeeze if our elected leaders restore trust by helping New Yorkers help themselves save and by safeguarding future benefits they’ve earned,” said Beth Finkel, AARP New York State Director.
This coming year provides a key window for elected leaders at both the state and federal levels to help restore retirement as a real option for New Yorkers.
“Nearly nine in 10 New York City Hispanic and Latino Gen Xers and Boomers say it is a problem for New Yorkers to save enough for retirement. They should know; they are living it,” said Don Levy, Director of the Siena College Research Institute. “Only 14% of these Xers and Boomers in the city are living comfortably.”
Future health care costs present huge concerns: only 11% of Gen Xers and Boomers are very prepared to pay the average $476 per couple in expected monthly out-of-pocket healthcare costs in retirement, and 62% of both generations call affordability of long term care a “very significant problem.” Only one in 10 is prepared to pay more than $50,000 a year in long-term care, yet a home health aide costs $52,620 annually on average in New York, while the average yearly cost of a New York City nursing home exceeds $144,000.
Solutions to Help New Yorkers Prepare for Retirement
Nearly half (46%) of respondents said government is doing a poor job making it possible for New Yorkers to save enough for retirement. Independent AARP research shows over half of all 18- to 64-year-old private sector employees in New York can’t get a traditional workplace retirement savings plan such as a pension or 401(k)—and it’s worse the younger the worker, with over 60% of Millennials lacking access.
A state-facilitated workplace retirement savings option for private sector workers who lack access to one at their job won the support of 83% of all survey respondents. AARP is advocating a professionally-managed, automatic payroll deduction model that allows employees to opt out – since studies show over 90% of employees participate if auto-enrollment is provided.
The U.S. Labor Department recently issued a rule allowing states to enact retirement savings plans for workers. Governor Andrew Cuomo has launched the “NY SMART” (Saving More to Achieve Richer Tomorrows) Commission to study lack of retirement savings and propose solutions. He submits his proposed state budget in January as the 2017 state legislative session begins.
Although 44% of respondents expect to rely on Social Security for most of their retirement income, 52% of Gen Xers said they’re not confident they’ll receive promised benefits—and 84% of both generations call the likelihood Social Security will remain available for future generations a significant problem.
In fact, if federal leaders don’t act, Social Security benefits face a nearly 25% cut in 2034 that could cost recipients as much as $10,000 a year. AARP conducted its “ Take A Stand” campaign this year to press the presidential candidates to detail their plans for updating Social Security for the 21 st Century and to press congressional candidates to commit to working with the new administration.
AARP offers consumers resources to help them plan, including calculators to help determine Social Security benefits, retirement preparedness and health care needs, as well as financial workshops. The survey has a margin of error of plus or minus 4.8%, including 7.2% for the Gen X sample of 261 respondents and 5.9 % for the Boomer sample of 302 respondents.
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CONTACT: Jordan McNerney, 212-407-3732, email@example.com